Many organizations recognize intuitively the qualitative
benefits of improving how they govern information but have a difficult time
quantifying these benefits or galvanizing their organizations forward.I’ve recently worked with a number of large
organizations to go beyond Information Governance to improving Information Economics.This involves many of the concepts of governance
but puts a focus on the economics – the value and the cost – of
information.I use the term Information Economics to refer
to understanding and extracting value, knowing and controlling cost, and, most
importantly, aligning cost to value; an Information Economics practice can
improve the profit margin on information.

This is both challenging and important because the value of
information declines over time while the cost is constant and information risk
rises over time. The widening gap
between the value of the information and its cost and risk create a negative
economic impact on any organization – the cost of information and the risk it
poses exceed its value.

Certain types of retain or lose value faster than others and
the value lifetime varies by industry as well.For example, the duration of time that product development information
is valuable is a function of product lifecycles and the R&D cycle time to
invent and bring a product to market.In the fast-paced consumer electronic segment where a new model comes
out every 10 months and consumers replace their devices just as often,
6-year-old product design information is of little value as it is far outdated
and the unlikely source of new innovation.On the other hand, aircraft lifespans of 30 years and the very slow
customer turnover make 6-year-old product data of value to both the business
and of interest to the regulators of the industry.In either company, the duration of time that
back office information is of value is likely similar.

In many business functions and industries, regulators and
government agencies require companies to keep data after it has lost its
business value.In fact, the law was
written to force organizations to act against their own interest to ensure that
information the company would otherwise dispose is available for investigation
or litigation.This regulatory requirement
is a tax on the business – it is a cost without an offsetting benefit or
value.Of course, companies have other duties to
produce information in the event of investigation and litigation that apply to
the total universe of potentially relevant information they have on hand when
the investigation or litigation is anticipated or occurs (the duty to preserve
evidence).As data ages, it is
phenomenally expensive to gather, process, restore and review this information
because the technology to restore and read it has long-since decayed, the
location and nature of the data is difficult to distinguish without restoring
it, and the context for understanding it completely absent.Gartner estimates the cost at $18,000 per
gigabyte!Data that neither the business
nor the regulators need is pure risk to the organization with tremendous cost
exposure.At IBM, we are helping our
customers improve information economics through continuous alignment of cost to
information value.When orchestrated
under a strategic program and sequenced by information economics principles, many
of the activities traditionally associated with information and lifecycle governance
are levers to ensure that the cost of information aligns with its value, that
its full value is realized and that the risks information poses are managed
cost-effectively.

There are three important inflection points over the value
cycle:

1. Analytics – Even when information has value to the business, if
business stakeholders aren’t able to extract and apply that value in the
decisions they make, the value is lost (and it represents only cost to the
organization).Most of us, however,
lose the context of information we created ourselves very quickly and we lack
context on information our colleagues may have gathered or generated that is of
value in our decisions.Content
analytics and big data analytics help organizations maximize value during the window
of time in which it exists – this is essential to improving economics.

2. Cost and Volume Compression – As data ages out and loses value or
the frequency of its relevance to the business, it’s important to compress its
cost in parallel.This is particularly important when there is
no business value and only a regulatory need to keep the data.As individuals most of us never consider
over-paying our taxes, but organizations that over retain or over-spend on storing
data for regulators are over paying their taxes!In other cases, data without value is
inappropriately stored as if it is premium value such as test data and
non-production instances, which clearly lack the same business value as their
production counterparts.Archiving
data to reduce its footprint and cost keeps the ratio of cost to value in line
and tiering data to an appropriate cost point also drive information
economics.

3. Defensible Disposal – When neither the business nor regulators need
information any longer, dispose of it.Retaining it longer at any cost point is waste, unnecessary cost and
risk.Over paying for useless data
actually reduces the capital and resources companies can invest in maximizing
information of value.

In the next blog, we will discuss the four building blocks for improving information economics. In the meantime, consider whether your organization can quantify true information cost and whether the cost to value ratio can be improved!

About the Author – Deidre is widely credited with having
launched the first commercial applications for legal holds, collections and
retention management and is a recognized thought leader in legal and
information governance with numerous patents in the field. In 2004, she founded
the CGOC (Compliance, Governance and Oversight Council), a professional
community with over 2000 corporate members, to advance practices for
governance, retention and eDiscovery. Deidre has authored many papers in the
eDiscovery and governance field. She has been a member of several Sedona
working groups since 2005 and co-leads the EDRM IGRM Initiative. She is a
seasoned entrepreneur and executive with 25 years’ experience applying
technology to inefficient business processes to reduce cost and risk. Deidre
was inducted into the Smithsonian Institution for innovation in 1999 and again
in 2000. Today, she leads IBM’s Information Lifecycle Governance business,
which includes its eDiscovery, records and retention, archiving and defensible
disposal solutions.

After 15 years of looking after Datacap’s marketing
interests, I was pretty sure that I could no longer be surprised. When it comes
to document capture, it’s easy to feel like you’ve seen it all.Yet, IOD 2012 was filled with surprises – and
the good the kind.Since joining IBM’s
ECM division in 2010, the Datacap product – with its open, rules-driven
architecture – has inspired many, it seems, to extend its capabilities in all
kinds of directions.It was at IOD,
where the extent of all that extensibility became apparent to me.

I had the pleasure of hosting a luncheon at IOD 2012 called
“The Seven Secrets of Success for Capture Engagement.”The idea being that we would invite Datacap
users and prospects to a delicious lunch and then show off seven new things you
can do in the Datacap environment that help our customers delight their
customers.I started asking around about
new Datacap applications and, suddenly, I was wondering how to keep the list to
only 7.

Within the IBM technical community, our developers had come
up with cool things like integrating Datacap into a Fujitsu network scanner so
that anyone could walk up, push a few buttons and start capturing documents
using the scanner’s touchscreen – even for verification of data. We also demonstrated
how to add new documents into the Datacap Entry-Level product with just a few
clicks – setting up sophisticated document ID and data validations in the
process.And Datacap co-founder and
software architect Noel Kropf acted out the part of a delivery driver –
complete with brown shirt and shorts - who saves his company time to bill by using
Datacap with an iPhone to capture signed delivery documents on the spot.

If demonstrating Mobile Capture was exciting – and it
certainly had our audience of 60 customers, business partners and IBMers
sitting up and taking notice – what got me revved up was seeing what our
business partners had done.

IBM partner Databank showed
an application they designed and installed at a bank to accelerate loan
approvals for customers, which integrated a Fujitsu network scanner, Parascript
advanced handprint recognition, and a real time workflow to enable a regional
manager to support a branch request in minutes.

EDAC Systems, which has
developed several applications with Datacap, demonstrated some enhancements they’ve
made with image processing to improve text recognition – even for handprint –
to enable correspondence tracking, among other uses.

European partner xft showed off its certified connector to SAP, which allows Datacap to “talk” to
SAP in real time – for PO line item reconciliation during the capture process
and facilitates a smooth handoff to SAP of captured data.

Imagine Solutions, IBM’s 2012 Excellence Award winner, showed a live demo of their solution for mortgage processing with Datacap that
leverages IBM Content Classification to correctly identify and classify mortgage
documents in a batch, which is as close to a David Copperfield magic trick as
we had in Las Vegas.

All in all, we showed off 8 solutions at our luncheon and
could have shown another 8 if we had the time. Tritek Solutions has built a
human resources capture solution, Miria Systems has a proven P2P solution, CM Mitchell Consulting has developed
capture solutions for Oracle, and CGI has built a complete
healthcare document management solution with Datacap and Production Imaging
Edition, called Sovera. Furthermore, Magic Lamp Software, Neocol, and R2K have enhancements of their own that would have fit nicely in our lineup of
solutions for “capture engagement.”

For me, the “Seven Secrets of Success” turned out to deliver
unexpected surprises about the creative and technical prowess of the new
“ecosystem” of partners who have taken Datacap in new and interesting
directions. I certainly did not list all the enhancements available in this
short report and I can only imagine what new solutions are being put together
even now.